NH's new law protecting auto dealers is challenged

CONCORD, N.H. (AP) — Farm and heavy equipment manufacturers including John Deere have sued to block a new law that gives New Hampshire auto dealers new protections in their contracts with them.

The companies say the so-called Auto Dealers Bill of Rights, which takes effect Sept. 23, improperly lumps them in with automakers. John Deere, famed for making farm equipment, tractors and other heavy-duty equipment, argue that the law is unconstitutional in a 170-page suit filed this week along with along with AgCo and Case New Holland.

"It represents an unprecedented level of regulation for our industry and jeopardizes Deere's ability to do business in New Hampshire by voiding many of the provisions of our dealer agreements," said Ken Golden, director of global public relations for Deere, which has its headquarters in Moline, Ill.

Golden said the agricultural and other equipment dealers operate in a different sphere than automakers and should be regulated differently. The company says it should be free to work with its dealers "to ensure that our agreements and policies have mutual benefit and support the investments that each party makes in our business."

Auto dealers had said they had no leverage in agreements with manufacturers that could require them to pay for costly and unnecessary renovations, ultimately driving up costs for consumers.

When she signed the bill in June, Gov. Maggie Hassan said it leveled the playing field between manufacturers and dealers.

Peter McNamara, president of the New Hampshire Auto Dealers Association, says some dealers were paying millions for manufacturer-mandated upgrades every five to seven years. He said his 500 members, including 180 franchisees, argued that the upgrades didn't automatically equal more sales.

"Look, I like a cappuccino maker at a dealer, but it's not going to make me buy a car," he said.

McNamara also noted that the state has already been regulating other vehicles, such as ATVs.

"They're making the same arguments they made in the legislature and those were rejected," he said.

The Alliance of Auto Manufacturers also opposed the bill, saying a provision determining warranty reimbursement would simply boost dealer profits and was a "money grab by New Hampshire dealers."

The bill also ends mandates by manufacturers to use out-of-state products and contractors to do showroom upgrades and ensures proper reimbursement for warranty work done by local dealers.

The lawsuit was filed in the Northern District of Hillsborough County Superior Court. A preliminary hearing will occur by Sept. 16.